First emission certificates for a project of the World Bank’s "CDCF" climate protection program
* Two years of “Community Development Carbon Fund” – BASF draws a positive interim balance
Two years after its inception, the “Community Development Carbon Fund” (CDCF) – a World Bank fund sponsoring the reduction of greenhouse gas emissions in developing countries – has for the first time received official emission certificates for a project under the provisions of the Kyoto protocol. This was in recognition of a hydro power plant in La Esperanza in Honduras financed with money from the fund to which BASF also contributes. The power plant has been providing a reliable supply of electricity to some 40,000 people in the town and surrounding communities for about a year. This will reduce Co2 emissions by 720,000 metric tons of CO2 equivalent within the next 21 years because fossil fuels will be replaced or avoided.
The CDCF was established in July 2003 by the World Bank, governments and private companies. BASF was the only German company to make a commitment of $2.5 million at the outset, thereby helping to achieve the required CDCF starting volume of $40 million. Now that the first CO2 emission certificates have been issued, BASF as a participating company can draw a positive interim balance.
“About 40 projects in developing countries in all regions of the world have now been accepted for sponsorship by the fund”, comments Ernst Schwanhold, President of BASF’s Environment, Safety and Energy competence center. The CDCF, which has now been closed, meanwhile has an investment volume of about €130 million provided by eight countries and 18 companies.
The CDCF projects are recognized as “Clean Development Mechanisms” (CDMs) under the provisions of the Kyoto protocol. Participation in these projects allows companies to acquire CO2 reduction certificates also in developing countries. Since 2005, these reduction certificates have been accepted as part of the EU emission trading system. “By participating in the fund, we are emphasizing our commitment to sustainable development and the instruments of the Kyoto protocol. These mechanisms are far better suited to reducing global emissions of greenhouse gases than the regionally limited emissions trading system in the EU”, is how Schwanhold explains BASF’s participation in the “Community Development Carbon Fund”.
Dr. Dirk Drechsel, who is responsible for coordinating greenhouse gas trading at BASF, draws attention to the unique nature of the CDCF: “Participating in the fund is an excellent opportunity for BASF to acquaint itself with the complex mechanisms of global greenhouse gas trading. Moreover, the company is backing only those projects that focus particularly on the poorer developing countries that result both in a reduction in emissions and a sustainable improvement in the quality of life of the population”.
One of the first projects launched by the CDCF is the hydro power plant in La Esperanza. Besides being a power supplier, the power plant has become a much sought after employer in the Honduran region and now offers up to 30 people regular employment.
Another project is currently taking shape in Ethiopia, where 15,500 hectares of woodland are being reforested. Around 110,000 people in the region are benefiting from the reforestation project in the form of improved water quality, reduced soil erosion, increasing biodiversity – and above all growing employment. In ecological terms, this project will mean a CO2 reduction of 5.2 million metric tons in the next ten years.
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